German ball bearings major Schaeffler has launched an offer, estimated at 3.64 billion euros, for the acquisition of Vitesco Technologies Group. This is done to make a leading motion technology company with four focused divisions. This includes a combined division E-Mobility with significant growth potential.
Vitesco Technologies has about 38,000 employees at around 50 locations worldwide. They reached a revenue of 9.07 billion euros in CY2022. They are currently a driving force in electric vehicle components along with its existing ICE parts business.
Schaeffler states that it is “convinced that the combination with Vitesco will significantly improve competitiveness. Especially in the fields of electrification, Schaeffler and Vitesco have highly complementary technology portfolios, allowing the combined company to offer best-in-class solutions across all dimensions, leveraging the accelerating growth opportunities in e-mobility. Schaeffler and Vitesco will also be able to optimize profitability in conventional powertrain technologies, which will retain an attractive margin and cash profile, as well as in chassis and the Automotive Aftermarket business.”
The four divisions
Schaeffler plans to create four focused “pure-play” divisions. They are discussed below:
- The E-Mobility Division will combine the highly complementary assets and capabilities of Schaeffler and Vitesco. This is done with the ambition to create a market leader in e-mobility.
- The Powertrain & Chassis Division will include both partners’ mature businesses. They will be market leader in conventional powertrain plus chassis.
- The Vehicle Lifetime Solutions Division will combine Vitesco’s Automotive Aftermarket activities with Schaeffler’s existing aftermarket platform. This will create an integrated platform player.
- The Bearings & Industrial Solutions Division will consist of Schaeffler’s current Industrial Division and its Automotive Bearings business. This is done with the ambition to build the leading global Bearings & Industrial Solutions company operating in four market clusters.
Klaus Rosenfeld, CEO of Schaeffler AG, said: “With the launch of the tender offer today, we are initiating a transformative move for Schaeffler. By combining Schaeffler and Vitesco, we will build a leading Motion Technology Company with four focused ‘pure-play’ divisions, a balanced well-diversified portfolio, and critical scale across its businesses. This includes a best-in-class e-mobility champion with significant growth potential. The combination will make Schaeffler and Vitesco stronger together and is beneficial for customers, employees, shareholders and business partners.”
